The government is set to issue retail treasury bonds this year to provide small local investors investment opportunities and at the same time raise funds to plug the government’s swelling budget deficit.

National Treasurer Roberto Tan told reporters that the new issue would help replenish the bonds that are scheduled to mature this year.

“We are seriously thinking of that. We have maturities so we need to replenish that,” said Tan.

The government last year successfully raised P70 billion as small investors and government-owned and -controlled corporations gobbled up the retail treasury bonds.

The three-year retail treasury bonds due 2011 fetched a coupon of 8.50 percent while the five-year debt papers obtained 9.0 percent in the July 18 auction when the government sold P9.214 billion.

The Development Bank of the Philippines, First Metro Investments Corp. and BPI Capital Corp. acted as general issuers of the retail treasury bonds.

First Metro Investments was also one of the issue managers last year when the national government successfully sold a record P77.6 billion worth of three- and five-year retail treasury bonds to small local investors and state-run enterprises.

Tan said the funds raised from the sale of retail treasury bonds were enough to cover the additional expenditures for various pro-poor programs of the administration of President Gloria Macapagal Arroyo to cushion the impact of rising oil and food prices. Lawrence Agcaoili